Acting as an Agent in a Power of Attorney Arrangement
As part of an estate planning process, individuals may need to set up a power of attorney arrangement, in which they designate someone they trust — known as an agent — to manage their financial affairs on their behalf if they are no longer able due to incapacitation or travel outside of the country. Power of attorney gives the agent the ability to make various decisions, including opening or closing bank accounts, waiving certain rights, trading stocks and paying bills.
Typically, these powers are only applicable as long as the individual setting up the arrangement is alive and of sound mind when doing so. However, individuals may also include special provisions stating that the duties of the agent extend after they are no longer able to make competent decisions for themselves.
The agent in a power of attorney arrangement acts as the fiduciary and is held to the standard that all actions taken match the wishes and are in the best interest of the principal. Unlike a trustee, the agent does not have total control over the estate or assets, as duties are shared with the principal unless stated otherwise. It’s important, however, that the agent keeps all records of transactions performed on behalf of the principal to avoid any legal repercussions or claims of abuse. If possible, the agent should meet with the principal on a regular basis to keep make sure he or she remains completely informed.
The power of attorney arrangement typically goes into effect as soon as the principal signs the agreement. The contract may also state that the power of the attorney is “springing,” meaning that the agreement takes effect when a specific event occurs. This event may be a doctor ruling the principal as not of the capacity of mind to make sound decisions.
Appointing an agent in a power of attorney arrangement is an important consideration. If you need to set up power of attorney or have recently been named as one, contact an experienced estate planning lawyer at the Charles Law Offices in Florida.